Little fluctuation in car insurance pay-outs, says Injuries Board
A state body which rules on insurance claims for car accidents has said its awards fluctuate by as little as 1-2% a year.
Amid deep anger by motorists over a 70% rise in premiums in the last three years and 38% spike in the last year, the Injuries Board told a parliamentary watchdog that the levels of pay-outs it orders are relatively stable.
The Oireachtas Committee on Finance was told the agency processed about a fifth of the 33,500 claims it was notified of last year.
Conor O'Brien, chief executive of the Injuries Board, said it has no evidence to back up the insurance companies' demand for higher premiums from customers.
"There's nothing in our data that supports that level of increase," he told the inquiry.
The committee also heard from the Society of Actuaries in Ireland which warned that Central Bank statistics showed insurance companies were losing 20 to 30 euro on every 100 euro premium for car insurance.
Chairman Gary Dunne said: "There's evidence to suggest that Irish motor insurers were losing money, substantial amounts of money, from 2013-15."
The actuaries said statistics showed car insurance prices fell 27% between 2003 and the start of 2010.
The parliamentary committee also heard that insurance companies traditionally generated income through the premiums they charge customers and then using some of that money to make investments.
It was told that cash generated by the companies through their investments fell by 100 million euro between 2012 and 2014.
Pearse Doherty, Sinn Fein finance spokesman, said the spike in premiums was not all down to Ireland having average whiplash claims of 15,000 euro, legal fees or fraud.
"There's been a lot of focus about the expensive necks of the Irish people, the fraud and all of the rest and very little on the actual fact that the insurance companies themselves are seeing a dramatic drop on investment income which is one of the reasons why premiums are going up," he said.
Mr Dunne said: "It's fair to say it is a component. It absolutely is."
The hearings on motor insurance are continuing amid the opening of an inquiry by the Competition and Consumer Protection Commission into suspected breaches of competition law on insurance cost increases.
Insurers have been asked to give statements on the signalling of upcoming hikes in premium.
Meanwhile, the Injuries Board said a new Book of Quantum - the manual used as a guide to pay-outs f or injuries depending on their severity - will be published when the new law term begins next month.
The figures in the book will be reviewed every three years in the future.
Mr O'Brien said: "It's not a silver bullet for the current issue with insurance premiums but if it is used consistently it will certainly help."